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On balance, however, I do not think that even the extraordinary economic conditions we are witnessing today are going to have much impact on the likelihood of war. Why? First of all, if depressions were a powerful cause of war, there would be a lot more of the latter. To take one example, the United States has suffered 40 or more recessions since the country was founded, yet it has fought perhaps 20 interstate wars, most of them unrelated to the state of the economy. To paraphrase the economist Paul Samuelson’s famous quip about the stock market, if recessions were a powerful cause of war, they would have predicted “nine out of the last five (or fewer).”

Second, states do not start wars unless they believe they will win a quick and relatively cheap victory. As John Mearsheimer showed in his classic book Conventional Deterrence, national leaders avoid war when they are convinced it will be long, bloody, costly, and uncertain. To choose war, political leaders have to convince themselves they can either win a quick, cheap, and decisive victory or achieve some limited objective at low cost. Europe went to war in 1914 with each side believing it would win a rapid and easy victory, and Nazi Germany developed the strategy of blitzkrieg in order to subdue its foes as quickly and cheaply as possible. Iraq attacked Iran in 1980 because Saddam believed the Islamic Republic was in disarray and would be easy to defeat, and George W. Bush invaded Iraq in 2003 convinced the war would be short, successful, and pay for itself.

[Michael R., 7-17-24, AEI, “The Fed Should Not Cut Interest Rates Yet”, , accessed 7-18-24, AFB]

WASHINGTON, DC – With inflation cooling and unemployment rising in the United States, investors are betting that the Federal Reserve will cut interest rates. At the time of this writing, market prices imply a less than 2% chance that the Fed will not reduce rates at its policy-setting meeting in September, and even indicate a 7% chance that it will lower rates at the next meeting later this month.

[Alicia, July 11, 2024, CNN Business, ‘Prices fell in June for the first time since the start of the pandemic’, , accessed July 14, 2024, CT]

Prices may not be rising as quickly as they have been, but that might not bring much solace to American households who see that the overall CPI is a good 20% higher than it was in February 2020. (In recent history, that index would typically rise about 10% over a 54-month period, BLS data shows).

[Damir, 7-9-2024, Seeking Alpha, “The CPI Preview: Inflation To Keep Rising This Summer, Despite The Slowing Economy,” https://seekingalpha.com/article/4703136-the-cpi-preview-inflation-to-keep-rising-this-summer-despite-the-slowing-economy, accessed 7-9-24] nikoglenn

Over the next two months, we are likely to see rising annual inflation, which will prevent the Fed from cutting interest rates in September.

[Megan Cerullo, 10-30-23, CBS healthcare reporter, CBS, “Working-age Americans are struggling to pay for health care, even those with insurance, report finds,” , accessed: 07-09-24, ES]

Efforts by insurance companies to expand their provider networks would also lower people's out-of-pocket costs, she said. As of 2022, more than 100 million Americans carried debt related to obtaining health care, according to the Kaiser Family Foundation.

[Megan Cerullo, 10-30-23, CBS healthcare reporter, CBS, “Working-age Americans are struggling to pay for health care, even those with insurance, report finds,” , accessed: 07-09-24, ES]

Just over half of working-age Americans say they sometimes can't afford health care, according to The Commonwealth Fund. About 4 in 10 workers with employer-sponsored insurance or who are on Medicaid say they have difficulty paying, while that rises to about 6 in 10 for people who buy coverage through the Affordable Care Act's marketplaces, the study found.

[Tahir Amin and David Mitchell, 2-24-23, Amin is the Co-Founder and Co-Executive Director of Initiative for Medicines, Access & Knowledge (I-MAK). Mitchell is a cancer patient and Founder of Patients for Affordable Drugs, TIME, “Big Pharma’s Patent Abuses Are Fueling the Drug Pricing Crisis,” , accessed: 07-08-24, ES]

Today, 1 in 4 Americans cannot afford to take their medications as prescribed. Too many seniors are having to ration their treatments to get by until their next social security check arrives. And contrary to what industry lobbyists argue, soaring drug prices are not the inevitable result of research and development costs to bring breakthrough drugs to market. It’s time to put this widely debunked excuse to bed.

[Ling Zhou, Ecole polytechnique federale Chair of Innovation and IP Policy, 4iP Council, “Patents and Supracompetitive Prices: Evidence from Consumer Products,” , accessed: 7-11-24, ES]

The pharmaceutical industry offers an obvious set-up for studying the effect of patent protection on product prices. The drug discovery and development process is costly and risky. R&D expenditure for each new molecular entity is esmated at $1.8 billion; meanwhile, the average success rate from pre-clinical stage to launch is esmated at about 8 percent (Paul et al.,2010). Furthermore, patents are an efficient way to deter entry in this industry. Drugs are so-called ‘discrete’ products with a well identified ‘invention’ (i.e., an active ingredient) clearly described in the patent specification. However, production is relatively cheap, and patent-protected drugs are usually sold with a high markup (Morton and Kyle,2011). This setup is particularly attractive for generic manufacturers, who enter the market as soon as drugs lose patent protection.

Leigh Phillips had a very useful piece in Jacobin on how patent protections are impeding progress in developing and distributing vaccines or treatments for the Coronavirus. The piece points out how the United States has engaged in a pointless competition with the rest of the world, which has involved trying to procure control over a potential vaccine. It also points out how pharmaceutical companies are planning to charge exorbitant prices that are likely to limit access, especially in developing countries.

All of this is very true and important for the public to know, but where the piece goes badly off the mark is in the punchline in its subhead: “But the real architect of these crimes is not CEOs or shareholders, but the market.”

[Copperpod, one of the world's leading technology research and forensics firms, 5-11-22, Copperpod Intellectual Property, “How Much Does Patent Litigation Cost?,” , accessed: 7-11-24, ES]

According to patent litigation statistics, patent lawsuits can extend for years and cost millions of dollars, and cost between $2.3 million and $4 million on average.

[Santosh Ganesh, 5-11-24, investment impact alliance and Digital Transformation Strategist, LinkedIn, “The High Cost of Frivolous Patent Suits: Stifling Innovation or Protecting Rights?,” , accessed: 7-9-24, ES]

The financial burden of frivolous patent suits is undeniable. A 2020 study by the U.S. Chamber of Commerce estimated that patent trolls cost the U.S. economy a staggering between $85 billion and $290 billion annually. This impact extends far beyond the immediate cost of litigation. Companies facing lawsuits experience disruptions in operations, lost productivity, and a chilling effect on R&D activities. Startups, especially those with limited resources, are often disproportionately affected. A single lawsuit, even if ultimately dismissed, can cripple a nascent company, hindering the very innovation the patent system is designed to encourage.

[Feng Chen, Yu Hou, Jiaping Qui, Gordon Richardson, Feng and Gordon are from the Rotman school of management, Yu is from the smith school of business, and Jiaping is from the Degroote school of business, April 2023, Science Direct, “Chilling effects of patent trolls,” , accessed: 7-11-24, ES]

Our results reveal significant market value losses for at-risk technology peers around the filing of NPE-initiated material cases. The equally weighted average CARs for all at-risk technology peer firms are −1.49 % in the three-day window around the litigation announcements. In terms of dollar values, we estimate that at-risk technology peers incur an average market value loss of $29.8 million per firm when NPEs sue their technologically related defendants. We further show that market value losses of technology peer firms surrounding the lawsuit filing date are significantly associated with their probabilities of being sued, suggesting that investors react to sequential lawsuit strategies of NPEs. We also show that the negative market reactions around the filings of patent lawsuits are much more pronounced if the lawsuits are initiated by NPEs rather than by PEs. The average market value loss for each technology peer involved in PE litigations is only $9.2 million on the filing days, consistent with the findings that the likelihood of being sued for at-risk technology peers is significantly higher for NPE patent litigation but not for PE patent litigations. Taken together, the results show that the uniqueness of sequential litigation strategies of NPEs causes significantly higher market value losses for at-risk technology peer firms.

[Feng Chen, Yu Hou, Jiaping Qui, Gordon Richardson, Feng and Gordon are from the Rotman school of management, Yu is from the smith school of business, and Jiaping is from the Degroote school of business, April 2023, Science Direct, “Chilling effects of patent trolls,” , accessed: 7-11-24, ES]

We argue that NPEs tend to aggressively and sequentially pursue targets for the following reasons: (1) NPEs often take advantage of patents with “fuzzy boundaries”, especially in the IT sector; (2) defendants may settle what they consider frivolous suits with NPEs due to high cost of patent litigation; (3) the business model of NPEs rests solely on patent litigation; (4) NPEs strategically time the lawsuit and put maximum pressure on the alleged infringing firm for outsized damage awards; and (5) the non-manufacturing status of an NPE has a strategic advantage in that the target defendant cannot file counterclaims of patent infringement. Furthermore, instead of suing all potential target firms in a “one-time deal”, it is strategically more effective for NPEs to first target the most vulnerable defendant firms to increase the odds of winning (Hu, 2014; Love, 2014; Cohen et al., 2016, Cohen et al., 2019). As such, defendants' technology peers would expect a higher likelihood of being sequentially sued by NPEs after the litigation announcement, despite the fact that NPEs might select multiple firms to initiate litigations.

[Feng Chen, Yu Hou, Jiaping Qui, Gordon Richardson, Feng and Gordon are from the Rotman school of management, Yu is from the smith school of business, and Jiaping is from the Degroote school of business, April 2023, Science Direct, “Chilling effects of patent trolls,” , accessed: 7-11-24, ES]

We find that non-practicing entities (NPEs) exhibit a unique legal strategy of sequential rounds: (1) subject to the same patent, NPE plaintiffs file approximately seven follow-on lawsuits after the initial lawsuit; and (2) when a firm is sued by NPEs, the likelihood of its technology peers being sued increases by 14 % in the subsequent year. Defendants' technology peers experience significant market value losses around the lawsuit filing date. Moreover, defendants' technology peers respond to NPE litigation risk by increasing R&D investments to develop workaround technologies. However, the increase in R&D incrementally generates fewer patent citations or patents with lower values. Thus, our results highlight broader wealth effects and corresponding real effects of NPE-initiated litigation on defendants' technology peers. These results provide sharp contrasts to the insignificant wealth and real impacts on defendants' technology peers if litigations are initiated by practicing entities (PEs). The new evidence informs the current regulatory and policy debates pertaining to NPEs.

[Nick Skillicorn, ideatovalue.com chief editor and founder, 8-31-16, Inc., “How the Current Patent System Actually Hurts Inventorsm,” , accessed: 7-11-24, ES]

If you want to prove that the patent was not valid, then the only way to prove that the lawsuit should not have happened in the first place is to have the legal system decide, analyse all the patents and claims, and determine once and for all whether the patent is valid.

[Nick Skillicorn, ideatovalue.com chief editor and founder, 8-31-16, Inc., “How the Current Patent System Actually Hurts Inventorsm,” , accessed: 7-11-24, ES]

I want to get this out of the way right now.

[Dee, 4-24-24, UCLA Anderson Review, “$52.6 Billion: Extra Cost to Consumers of Add-On Drug Patents”, , accessed: 7-10-24, AngH]

In the $485 billion pharmaceutical industry, the 20-year primary patent on a drug starts with the discovery of a single new molecule that will, if all goes well, become the active ingredient in a new drug. Unlike tech inventions, molecules have specific structures that are easily differentiated.

This is not just a question of making health care affordable. There is a huge amount of money at stake. We will spend over $500 billion this year on prescription drugs, more than $3,000 per household. In the absence of patent monopolies and related protections, we would almost certainly pay less than $100 billion. Patent protections also add more than $100 billion to annual spending on medical equipment. By my calculations, patent and copyright protections cost us more than $1 trillion annually, an amount that is more than half of all after-tax corporate profits.

And, this money is very unevenly distributed. If were not for the patent and copyright protections on Microsoft’s software, Bill Gates would probably still be working for a living. More than a quarter of the Forbes 400 richest people owe their wealth in large part to patent and copyright monopolies.

Patent monopolies actually are causing even worse problems than Phillips indicates. For example, he notes that Gilead is likely to charge very high prices for its drug remdesivir, the first drug that shows clear evidence of being an effective treatment for the coronavirus. It turns out that Gilead has developed another drug, GS-441524, that holds equal or better promise as a treatment for the coronavirus, and is easier to manufacture. The reason that Gilead is pursuing tests with remdesivir, and not GS-441524, is that the patent is much newer for remdesivir, and therefore it can expect many more years of a patent monopoly for this drug.

Another problem with patent monopoly supported research is the incentive to lie about results. We may have seen this with the limited test results reported by Moderna, which were the basis for its jumping ahead with the clinical testing of its vaccine. These reports were sufficient to send its stock price soaring, leading to big payouts for top executives, even if they may not provide much evidence of the vaccine’s effectiveness.

[Dee, 4-24-24, UCLA Anderson Review, “$52.6 Billion: Extra Cost to Consumers of Add-On Drug Patents”, , accessed: 7-10-24, AngH]

Pharmaceutical companies gain an average three years in monopoly protections on branded drugs by filing multiple secondary patents, throughout and beyond the development process, a study by UCLA Anderson’s Charu Gupta indicates. Unlike primary patents, which apply to a drug’s active ingredient, secondary patents can cover things like how the drug is administered, what disease it will treat and dosing.